Real-time options education and strategies
Below is an approximation of the values of a Call Calendar spread vs. a 5-point wide short Call Diagonal. I’ve compared the 2 strategies over a 1 week period of time. If I bought a 1% OTM Fri/Mon spread with 14 DTE and held it for 1 week what could I expect the value to … Read more
I’m expecting a grind up in SPX over the next 2 months so I’m layering on mostly inexpensive positions (and a few expensive ones) in multiple Fri/Mon expirations to add size and build a position. Below is my current position as of Dec4. I’ll likely be adding the trade below at some point in the … Read more
The option chain (below) shows the value of TSLA Calls with 1 week until expiration. If I had bought a Call Calendar spread with short Calls expiring 1 week prior to the long Calls then I can estimate the value of that Calendar spread at the time the short Calls expire. Tesla’s closing price at … Read more
Something I need to address before I get into the details of this post. Nobody who reads this post should ever attempt to trade this, or any strategy, based on my or someone else’s experience! I’m here to educate traders based on my many years of trading experience, not to recommend trades. Take what you … Read more
Below is a description of how I traded Tesla this week. This post, as well as all of my other posts on this blog, are for educational purposes. They aren’t trading advice. You should never risk your capital based on how someone else trades. Learn from others then develop your own trading style which suits … Read more
Most traders are familiar with the long Straddle or Strangle option strategy. A Straddle buys the same strike Put and Call in the same expiry and the Strangle buys a different strike Put and Call in the same expiry. The strategy often appeals to novice traders because it appears that the position can be profitable … Read more
I went on a small rant this week on my X timeline (@VegaOptions) about paid advisory services that don’t disclose their actual results. Many traders follow those services and think it’s their fault that they can’t make a profit when the system that they’re trading is flawed and nobody could make money trading it. If … Read more
Over the past couple years on this blog I’ve shown countless option strategies and chart setups with the goal of educating traders on ways to reduce risk in trading. Still, there are many, actually I’d say most, traders who are confused and suffering from information overload and I may be guilty of adding to that. … Read more
This will be a short post which I will revisit and add more content if/when I have time. The topic is the short Diagonal which is a Credit spread. Being a Credit spread means that the short leg is closer to ATM (at-the-money) and the long leg is further OTM (out-of-the-money). Credit spreads have a … Read more
Just a reminder that this, or any post on this blog, is based on trades that I have either placed or considered placing and should not be taken as a recommendation for anyone else to trade! Below is the Daily chart of RUT (Russell 2000 Index). Previously I viewed this chart as a very bearish … Read more